MARKET SEGMENTATION

Alduheza, Shynne B.
Bugais, Lislyn Megann D.
Cesar, Jan Harmony A.
Flores, Chiena Mae S.
Espana, Lorebeth L.
Lo, Manuel Timothy Jude C.
Manzo, Marie Angeli F.
Tan, Marie Charmaine B.

Marketers

identify individuals in the market who can be

served most effectively and profitably
use segmentation to identify similarities within
groups of consumers and benefit from these
similarities

Marketers

Identify opportunities in the market.

Tailor a unique marketing mix.
Charge and receive higher prices.
Serve customers more efficiently.
Gain a competitive advantage.

Definition of Terms
Market Segmentation
- dividing a market on the basis of
differences and forming subgroups based
on common characteristics
- goes hand in hand with targeting and
positioning
Segmentation
- identifies variables that can be used to
target desirable groups of individuals

Identifying Desirable Market Segments

identifiable
accessible
of sufficient size
responsive to the targeted marketing mix

Selecting Segmentation Variables

through experience and intuition
adopting the ideas of others
analyzing customer data

Segmentation Approaches
Empirical
based on professional
experience or information
colleccted from literature
resembles empirical
treatment by physicians
and pharmacists

Hypothesis-Driven
tests hypotheses about the
relationships between market
segmentation variables and
outcomes
gain insights about actual and
potential customers that can be
used to secure a competitive
advantage
builds on information used in
empirical segmentation
rely on market research
techniques to identify patterns of
consumer behavior

Empirical Segmentation
Advantages

Disadvantages

relies on marketer's experience

and ability to understand which
variables are useful

complex

expensive as the amount of time

devoted to it and the cost of the
subcriptions to the publication

bombarded with
tremendous amounts of
information about
customer behavior and
actions of competitors

time-tested
business owners rely on their
intuition and knowledge to serve
customers

Hypothesis-Driven Segmentation

Advantages

Disadvantages

uses methods from a variety of fields the more rigorous the

to gain greater understanding of
methods used, the
consumer behaviors and markets
higher the costs

Marketing Strategies Associated with

Segmentation
Differentiation Strategies
- selects two or more segments for targeting
- attempt to select a portfolio of products
and services to meet the needs of multiple
customer groups
Focus Strategies
Niche: small, narrowly defined market
a. Niche / Microniche Strategies
- select a single, profitable segment that
offers the best opportunity for success

Characteristics of a Niche
large enough to be profitable
underserved or ignored by competitors
able to be exploited by the unique skills
and capabilities of marketers

Common Ways of Segmenting Markets

Demographic
Geographic
Psychographic
Behavioral
Benefits

Demographic Segmentation

most easily segmented

most common bases of segmentation
useful in developing targeting strategies
variables: age, sex, income,
ethnicity,family size, ccupation, education,
family life cycle, religious affiliation,
nationality

Senior Market
users of prescription medications and
other forms of health care
fastest growing segment
with highest discretionary income
five variables for segmentation:
- discretionary income
- general level of health
- general activity level
- amount of discretionary time not taken up
with family, job, and social activities
- degree of social interaction with others

Cohort Segmentation
dividing consumers by age into a cohort
Cohort: a group of people of the same
generation ; the same historical events
during formative periods
-Great Depression: thrifty
-Vietnam War: challenge authority
-Others:
Depression
Babies,
Silent
Generation, Swing Generation, Greatest
Generaion, Baby Boomers, Generation X,
Generation Y, Millennials

Geographic Segmentation
permits pharmacists to target patients on
the basis of location
used to locate lucrative market segments
and
target
those
segments
with
promotional communications
variables: country, region, metropolitan
statistical area, city, county, state,
neighborhood, rural

Psychographic Segmentation
based on the premise that consumers are
influenced by personality, lifestyle, and
values
useful for shaping promotional strategies,
product development, and communication
decisions
uses
psychological
and
socioogical
research methods
- identify consumer values, beliefs, and
attitudes

Methods of Psychographic Segmentation

Personality Segment
-based on behavioral traits or personality
characteristics
a. compulsive
b. controlling
c. conservative
d. socializer
e. extrovert
f. need to achieve

Methods of Psychographic Segmentation

Lifestyle Segment
Lifestyle: relates to the activities, interests,
and consumers' opinions
- reflects a group's priorities and beliefs
about various issues
- used to classify senior populations

Segment

Characteristics

Barriers to
Treatment

How to Reach

Message

Disciples

obedient, trusting,
highly compliant with
therapies

sometimes
forgetful

pharmacists,
advertising,
popular press

remind, reinforce
benefits of
treatment

Medical Buffs

engaged, adherent,
trust physicians but
feel in control of own
health

have string
brands of ideas,
first to switch
brands

internet, medical
publications,
brand-specific
ads

position treatment
as patientphysician
relationship, stress
brand superiority

Naturalists

distrust
shun pharmaceuticals traditional
in favor of holistic
treatments,
remedies
anxious about
side effects

guerrilla
marketing,
condition-specific
website,
nonbranded ads,
point-of-purchase
displays

position treatment
as part of healthy
lifestyle,
emphasize the
natural

Immortals

devi-may-care types,
disregard physician's
recommendations

ill-informed,
often in denial

family members,
peers, telephone
reminders

deliver wake-up
call, clarify
necessity for
treatment

Fatalists

feel health is out of

control. often
noncompliant

family members,
feel hopeless and
peers, telephone
helpless
reminders

with help, you can

overcome
symptoms

Methods of Psychographic Segmentation

Segmentation by Values
- identify values upon which people base
their lives and day
- includes: self-respect, security,
excitement, sense of fun and enjoyment
of life, having warm relationships, selffulfillment, sense of beloging,
accomplishment, being well- respected

Psychographic Research and Drug Use

Realists
Authority Seekers
Skeptics
Hypochondriacs
Dissatisfied
Energetic
Sedentary

Combining Psychographic and Demographic

Variables

Ambivalent learners
Uncertain patients
Risk avoiders
Assertively reliants

Behavioral Segmentation
uses information about consumer actions and
choices to group customers
deals with utilization of health care services and
products
criteria include:
- type of health insurance or plan choices
- frequency of visits to health care providers
- self-care habits
- prescription drug use
- nonprescription and heral medication use
- preventive care behaviors
- level of participation in pharmaceutical care
activities

Pareto Principle
a relatively small number of people use a
disproportionate amount of health care
services and products
approximately 80% of most problems can
be attributed to roughyly 20 of their
potential causes
pharmacists should target 20% of the
market associated with drug misuse,
health care spending, and other behaviors

Types of Behavioral Segmentation

based on actual behavior
a. usage
- heavy, moderate, or light users
- disease management
- case management
b. occasion
- treating major and minor illness
- at home and on vacation
- for the respondents or for treating family
members

c. user status and loyalty

- user status: previous use
- first-time, former, repeat, or potential
users
d. willingness to adopt innovations
Individuals

Descriptions

Innovators

first to adopt new ideas and products

venturesome, eager to try new things, willing
to take risks
have a broader viewpoint, greater education,
and financial capability to absorb failures

Early Adopters
(Opinion or Thought
Leaders)

socially connected ad influenced by innovators

sought out for advice, respected by others,
and willing to share new idease through wordof-mouth discussions

Individuals

Descriptions

Early Majority

influenced by early adopters

careful, deliberate, willing to take more time in making
decisions
well integrated socially

Late Majority

cautious and skeptical wth regards to innovation

tend to wait to adopt innovations

Laggards

traditional in outlook and look to the past in decisionmaking

socially isolated and resist innovations

 based on potential behavior

- according to the readiness to buy or act in
some desirable manner
- unaware, aware, interest, evaluation, trial,
usage, repeat usage
based on a mix of actual and potential
behavior
- variables: at risk for drug-related problems

Benefits Segmentation
according to the specific benefits the
customers seek
consistent with the total product concept

Customers

Descriptions
seek the best product and
Quality buyers
service without regard to cost
look for personal and caring
Service buyers
service
hunt for the best value for the
Value buyers
money and expect service to
match the price
Economy buyers favor cheapest alternative

Consumers of
preventive
Descriptions
health services
need and actively seek reassurance that they are healthy
tend to overuse health services
Hypochondriac
good customers of vitains, self-diagnostic kits, and
prevenetive therapies

Health seeker

strive for a long, healthy life and use preventive care as

means to that end
actively participate in health behaviors
actively seek information about healthy practices and
preventive sevices
respond to the marketing of healthy foods

Band-Aider

like to brag how healthy they are

take great pride in how little the have needed to use health
care services
preventive health care is undesirable
seek care only when they are very ill or injured

Consumers of
preventive
Descriptions
health services

Do not bug
me.

use negative health behavior to cope up with the daily

stresses of life
avoid preventive health care

Follower

seek the guidance of others for preventive practices

seek advice from friends, family, other health professionals
tend to do what others recommend but are skeptical that
preventive health care will bring about the promised
improvements in health
more likely to put off health care until they get sick
unlikely to use vitamins, preventive remedies, or attend
health screenings

Self-sufficient

independent, self-reliant
tend to be skeptical of traditional health care and prefer selftreatment with nonprescription medications and home
remedies

Segmentation for the Practising Pharmacist

Goal: help identify and predict consumer
tendencies to act in specific ways

Pharmacists need to conduct research into

their needs and wants.
- Talk with Patients.
- Invite a group of patients to chat about
pharmacy services.
- Conduct surveys.
- Read the pharmacy and health car literature.

Use the internet.

Mine patient files.
Observe how customers shop.
Test-market ideas.

Pharmacists can use segmentation to target

specific customer groups.
- Identify key market segments within your
practice.
- Learn as much as you can about the segments
in which you are interested.
- Describe a typical person in a market segment.

- Determine the desirability of each segment.

- Select those segments on which you wish to
focus and create a written plan for each
segment.
- Establish a budget for each segment.
- Develop measures for the success of targeting
efforts.
- Choose a future date when you will reassess
your marketing efforts.